Wall Street gave up early gains and closed Friday mostly lower after oil prices topped $75 a barrel for the first time. The Dow Jones industrial average crept higher on strong earnings from 3M Co., and stocks overall managed a gain for the week.
Investors’ inflation fears intensified in afternoon trading, as oil prices climbed to a new record, rising $1.48 to settle at $75.17 a barrel on the New York Mercantile Exchange.
The continued gains in oil, gold and bond yields are keeping inflation worries at the forefront, said Ken Tower, chief market strategist for Schwab’s CyberTrader. Evidence of economic growth in next week’s reports will renew the debate over when the Federal Reserve might halt its rate tightening.
“The Fed is going to have a hard time stopping their increases if the economy seems to be gaining strength,” Tower said. “I think the Fed will have a very hard time talking down the inflation hawks if the data comes in stronger than expected.”
The Dow rose 4.56, or 0.04 percent, to 11,347.45, building on Thursday’s performance that was its best close since reaching 11,351.30 on Jan. 20, 2000.
Broader stock indicators were lower. The S&P 500 fell 0.18, or 0.01 percent, to 1,311.28, while the Nasdaq composite index fell 19.69, or 0.83 percent, to 2,342.86. An analyst’s downgrade of Dell Inc. helped send technology stocks lower.
Bonds edged higher, with the yield on the 10-year Treasury note slipping to 5.00 percent from 5.04 percent late Thursday. The U.S. dollar was mostly lower against other major currencies; gold prices rose and lingered at 25-year highs.
The major indexes ended the week with gains, due largely to the big advance Tuesday after minutes of the Fed’s late March meeting showed the central bank was leaning toward ending its interest rate hikes. Inflation data released in subsequent sessions and oil’s ascent stifled the market’s enthusiasm, but the Dow still rose 1.88 percent, while the S&P 500 index rose 1.72 percent and the Nasdaq gained 0.72 percent.
Analysts say next week’s trading will depend on the market’s interpretation of the latest government reports, which include first-quarter GDP, employment costs, new home sales and consumer confidence. Earning reports will also continue flowing in.
On Friday, Google Inc.’s earnings pushed its stock up $22.10, or 5.3 percent, to $437.10, but the technology sector stumbled after Citigroup cut computer maker Dell Inc. to “sell” on concerns about slowing growth and weakening margins. EBay Inc. also saw a second day of losses following its lackluster quarter. Dell sank $1.23 to $27.01, and eBay fell $1.68 to $35.09.
Ford Motor Co. posted its biggest deficit in more than four years after taking $1.7 billion of pretax charges from its costly North American restructuring plan. Sales slid 9 percent amid a continued slump in U.S. vehicle demand. Ford fell 63 cents to $7.32.
Dow industrial 3M rose $2.46 to $85.06 after saying its quarterly profit swelled 17 percent on a sturdy rise in sales. The market was also encouraged by 3M’s increased outlook.
Fellow Dow component McDonald’s Corp. said its earnings dropped 14 percent from the year before, when a tax break boosted its results. However, sales grew 6 percent to top Wall Street estimates. McDonald’s slid 48 cents to $34.60.
Drug company Wyeth’s profit advanced 4 percent from strong sales of antidepressant Effexor and heartburn medication Protonix. Wyeth climbed 73 cents to $47.50.
Advancing issues led decliners 17 to 15 on the New York Stock Exchange, where final consolidated volume was 2.52 billion shares, down from 2.63 billion Thursday.
The Russell 2000 index of smaller companies fell 2.55, or 0.33 percent, to 772.12, after spending most of the day in positive territory.
Overseas, Japan’s Nikkei stock average rose 0.5 percent. Britain’s FTSE 100 gained 0.84 percent, Germany’s DAX index added 0.52 percent, and France’s CAC-40 was higher by 0.88 percent.